Private renting rent increases

Landlords are entitled to increase the rent they charge, as long as they follow the correct procedures and the proposed rent increase is not excessive or unfair. The Tenancy agreement should include clauses for how and when the rent will be reviewed. The general rules for rent increases are:

• The landlord must get the tenant's permission if they want to increase the rent by more than what was previously agreed.
• The landlord should also only increase rent in line with similar properties in the area. They cannot push for an unrealistic or unfair increase in rent.

If the proposed rent increase is excessive or unfair, you can apply to the tribunal to challenge it and get a fair rent determination. You can only apply to the tribunal after you have received a section 13 notice. See below for further information.

Fixed-term tenancies

If the tenant is on a fixed-term tenancy (a tenancy where you have signed up to live in the property for a set period of time), the landlord cannot increase the rent until the fixed-term ends. If the landlord wants to increase the rent during the fixed-term, the tenant must agree to an increase or there must be a clause in the tenancy agreement which allows them to do this. The landlord can also choose to increase the rent if the tenant continues to live at the property after the fixed-term ends by signing a new Tenancy agreement.

Periodic tenancies

If the tenant is on a periodic tenancy (tenancies which run from month to month or week to week) the landlord cannot increase the rent more than once a year unless the tenant agrees to it.

There are several ways a landlord can increase the rent. They can:

1. Renew the tenancy agreement at the end of the fixed-term setting out the increased rent
2. Mutually agree a rent increase with the tenant and record this in a rent increase agreement
3. Use a rent increase clause in the tenancy agreement, if one is present
4. Use a 'Landlord's notice proposing new rent' form 4 (in England) or form 4D (in Wales) (also known as a Section 13 notice)

1. Renewing the tenancy

The simplest way to increase rent is to wait until the fixed term of a tenancy has expired. A landlord can then make a new tenancy agreement with the new proposed rent clearly stated.

2. Mutual agreement

If a tenancy agreement doesn't contain clauses related to rent increases and a landlord wants to increase the rent without serving formal notices, the landlord can see if the tenant will mutually agree to an increase. If agreeable this should be recorded in a rent increase agreement.

3. Using a rent increase clause

If the tenancy agreement contains a rent review clause (ie a clause that allows the landlord to review the rent mid-tenancy and propose an increase), the landlord should notify the tenant by written notice with the new amount and when the increased rent will begin. The recommended notice is 2 months.

The notice should be returned to the landlord with the tenant's name and signature to prove that they have acknowledged and accepted the rent increase.

4. Using the a Section 13 notice

If there is no mention of a rent increase in the agreement and the tenant is unwilling to agree to a rent increase then the landlord can issue a section 13 notice.

What is a section 13 notice?

A section 13 notice is used when a landlord is proposing new rent under an assured shorthold periodic tenancy of premises. This can only be done after the initial fixed-term has elapsed. Although section 13 applies to both England and Wales, there are two different forms. The section 13 notice for Wales, known as Form No. 4D, is the notice landlords must serve if the tenant and property is located in Wales. The section 13 notice for England, known as Form 4, is the notice landlords must serve if the tenant and property is located in England.

If the fixed-term of the tenancy has ended and no new agreement has been signed, then the tenancy automatically becomes a periodic tenancy. If the tenancy agreement doesn't provide any information or procedure on a rent increase, then the landlord can only increase the rent by getting mutual agreement with the tenant or by serving a section 13 notice.

How much notice should be given?

If the tenancy is a weekly, fortnightly or monthly periodic tenancy, the notice period must not be less than one month from the date of service of the section 13 notice. If you have a yearly tenancy, 6 months’ notice is required. This is normally a day that the rent is due. For example, if the tenant pays rent on the 10th day of the month, the date of the rent increase on the section 13 notice must be on the 10th day of a month.

What happens after the section 13 notice has been served?

Once the notice has been served, the tenant has until the date of the rent increase to make a decision. If the tenant doesn't do anything, then the rent will automatically increase and the tenant cannot dispute the rent increase. If the tenant wants to dispute the level of the rent increase, they will need to apply to the First-tier Tribunal (Property Chamber) in England or the Rent Assessment Committee in Wales.

The tribunal or committee must receive the application before the rent increase date given on the section 13 notice. Rent must be paid at the previously agreed rate until the tribunal or committee make a decision. The tribunal can decide that the tenant has accepted the rent increase if they pay the increased rent rate.

Negotiating an increase

It may not be beneficial for the landlord to impose an increase in rent. The tenant may no longer want to rent the property, in which case, the landlord will have to spend time and expenses in trying to re-let the property. It may also be an inconvenience for the landlord to try and find suitable replacement tenants, especially if there was a good relationship with the previous tenants.

The tenant will want to either have the rent stay the same, or have a minimal increase in the rent. Therefore it could be advantageous to negotiate the rent increase. These negotiations could include the level of rent increase both parties are happy with or to roll out the rent increase in incremental stages over a period of time (for example, an increase of £25 in the first 6 months and then an increase of £50 for 6 months after that).